What Is A Shorter Term Mortgage?
If you have been around mortgages for a period, a large majority of consumers have heard of or will have a 30-year fixed mortgage. Traditionally, mortgage terms came as 15-, 20- and 30-year terms. Now most mortgage companies can offer any terms between 8 and 30 years. It can be your choice.
What is the benefit of having a shorter-term mortgage? The shorter the term the faster you build equity and pay less interest over the term of the loan. The downside is the shorter the term the higher the monthly principal and interest payment will be. If you can make the larger monthly payments this can provide a great benefit, but you don’t want to stretch yourself too thin. Shorter term mortgages typically have lower interest rates as well because you are borrowing for a short period of time.
Remember, you can take a longer term mortgage and make extra payments on it as well, which a lot of consumers do so you are not bound to a higher payment. It is best to speak to a trusted mortgage professional like the Home Loan Advisors at Hall Financial who can review all your options and guide you to the right mortgage.